There are a few challenges new entrants into the business
will encounter. You face the possibility of purchasing substandard or
adulterated products.

Other difficulty involves finding quality substitutes,
price determination and trustworthy suppliers. There is also lots of stiff competition
from other supermarkets and grocery stores in your locality.

Substandard
products

Expired products

Adulterated
products

Finding quality
substitutes

Price
determination

Trustworthy
suppliers

Competition

Stocking

Pricing
the Goods

Although packaged goods have recommended sales price
there are lots of substitutes. The popularity of the brand and price usually
determines the level of patronage.

Make sure you purchase only products popular in your
neighborhood. Select popular brands that offer best prices to customers.

Things that affect price determination are where you
sourced the product, transportation costs and demography purchasing power. Your
price should be in uniformity with competing supermarkets in your locality.

If you offer high
prices your customers will go to competitors.

Things
that Determine Price

Buying
substitutes

Branded products

Where you
sourced the product

Transportation
costs

location

Supermarket
Business Startup

Start by writing a business plan and carrying out a
feasibility study. You need to register the business and obtain business
permits and licenses. Other important requirements include finding a good
location, credible suppliers, trustworthy staff, funding and marketing.

Write a
supermarket business plan

Register the
business

Raise capital

Find a good
location

Obtain business
permits and licenses

Find suppliers

Hire qualified
staff

Marketing

Supermarket
Business Plan

Write a supermarket business plan and factor funding,
location and sourcing the products. Conduct a survey to study competitors and
find out what your customers need. The business plan should also provide a
startup framework including expansion plan.

Select a catchy business name for your brand. You could
decide to form a proprietorship business, limited liability or partnership.

The legal structure determines the tax requirements and
management structure. Obtain a business permit and fulfill standard regulatory
requirements. Some of your items are subjected to value added tax and you need good
insurance cover.

Funding
the Business

You need substantial funds to start a grocery store or
supermarket. Majority of the funds are spend on supply and fixed inventory.

The working capital is huge and usually recurrent. Other
funding requirements are rent, security system, staff wages and maintenance.

To source funds present your Business Plan to a
commercial bank in your area. You need to open an account in the bank and
provide collateral.

The success of the enterprise depends on your location of
choice. A good location should have huge pedestrian traffic or large concentration
of people.

Good locations are within a popular shopping mall,
neighborhood or a busy commercial area. Other requirements include store
visibility, adequate parking and easy accessibility. The store should have adequate
storage and a large display board.

Find
Suppliers

The source of your products is another important aspect
of the business. Try to source inventory from manufacturers or major
wholesalers.